The millennial generation – those born between 1980 and 2000 – has become the most populous segment of society. Millennials (there are an approximate 75.3 million of them) now top Baby Boomers (they are just shy of 75 million) in sheer number.
Millennials act, interact, shop, socialize, think and travel differently than the generation that had been the most influential demographic in consumerism. Many companies have shifted their sales pitches accordingly. Volkswagen is a great example. It only follows that the real-estate industry needs to shift, too, in order to ensure a meeting of the minds with the customers of the future.
Here are five reasons millennials are influencing homebuying and homeselling markets.
They’ve got tech
Millennials know no world without a computer, keyboard and mouse. Most know no world without the Internet. The technology they were born into has shaped the way they communicate, get information and make purchases, including real-estate purchases.
“Accordingly, property owners, brokers and others involved in the purchase and sale of real estate will have to use the internet and technology to connect and even transact with millennials including virtual tours, mobile apps, online marketing and e-signature technologies,” writes Nav Athwal in a LinkedIn article titled “Five Ways Millennials Are Influencing Real Estate.”
They’ve got smarts
Millennials are intelligent. Nearly one-third of them have bachelor’s degrees. Find a school now. That means they will be curious, inquisitive and sensitive during real-estate deals. Agents will have to offer better transparency and more information to satisfy their clients during the homebuying process.
They’ve got debt
According to the article, the gross student-loan debt for all those millennials who earned college degrees amounts to $1 trillion. More debt equals less cash, which means millennials more than likely will delay buying a home for a few years and live with their parents until they can afford one. Or they might opt to rent an apartment until such time.
They’ve got limits
Millennials don’t want a lot of house. None of them longs for a white-picket fence, two-car garage and big back yard. Mixed-use, urban environments are more appealing because they can live, work and play there, often without having to get into a vehicle and drive.
They’ve got jitters
Millennials started entering the workforce right before and right after the recession, when employment growth was slow if not nonexistent. Seeing that real-estate bubble burst made them wise to the dangers of overextending their personal finances and buying more than they technically could afford. They are gun-shy when it comes to major purchases.
“This means that property owners, real estate professionals and lenders will have to change their basic strategies in order to close deals with this new demographic of buyers,” the article states. “These stakeholders will have to embrace and use technology effectively, think about the physical environment intelligently, and gain an understanding of how the great recession and large amounts of student debt are influencing consumption for millennials.”